Wednesday, 4 May 2016

Flyadeal marks one step forward, two steps back for Saudi aviation

Saudia made good on plans to establish a low-cost carrier last month when it unveiled the branding and tentative launch date for new subsidiary Flyadeal.

The flag-carrier believes that entering the low-cost market will help it pare back losses on its all-important domestic network. Low-cost carriers put cost-discipline at the heart of their business models, removing complimentary perks from ticket prices and maximizing operational efficiency.

That contrasts with the business model of traditional full-service carriers like Saudia, which focus on high-yielding customers by offering premium products and building slack into their schedules.

But while a dual-brand strategy could lift the state-owned carrier’s fortunes, some analysts are beginning to doubt the kingdom’s longstanding commitment to private-sector reforms...